Employees at The Orange County Register received an unsettling email from corporate headquarters this year. The owner of the newspaper, Freedom Communications, was writing to request workers’ consent to take out life insurance policies on them.

But the beneficiary of each policy would not be the survivors or estate of the insured employee, but the Freedom Communications pension plan. Reporters and editors resisted, uncomfortable with the notion that the company might profit from their deaths.

Funny how they miss the point.

What this does is increase the perverse incentive a pension fund already has in preferring you to die right away. Not only do they avoid paying out any pension, they also get the insurance policy pay-out.

So, how would they go about killing you early? Well, they have to invest that money they are holding somewhere. It’s just a matter of being selective where they invest. Their profit from that investment may not come from dividends after all…

Sue W on
June 24th, 2014 at 14:46:

Once you let MBAs and accountants run things, the logic is inexorable.

The churches do it better. They ask their parishioners to take out the policy, pay the premium, and name the church as the beneficiary.

pete on
June 24th, 2014 at 19:28:

For organizations other than churches this insurance is usually called Key Worker insurance, the original idea was to cover the life of someone whose death would adversely affect the firm…

Do they need the workers consent? I seem to remember Michael Moore covered this issue in his film ‘Sicko’ which showed how Wallmart profited from the premature deaths of some of its employees while feeling no obligation to pass the insurance benefit on.